Pumping up Planning at Olympus

Optical company seeks to cut planning cycle, reduce finish goods inventory with supply chain initiative

Rockville, MD  November 5, 2002  A division of Olympus Optical has implemented supply chain management software in a bid to streamline its planning cycle times and reduce its finished goods inventory.

Olympus has been driving forward an initiative designed to cut lead times for all products and reduce inventory by consolidating its SCM system, integrating the entire end-to-end planning process from sales to manufacturing, across multiple organizations and systems.

Now the Scientific Equipment Division of Olympus' Medical Systems Group is using a solution from software company Manugistics to power the organization's global supply chain management (SCM) system, MAPS. Olympus selected Manugistics solutions to streamline key processes, including demand forecasting, manufacturing scheduling, and order and inventory allocation.

With MAPS, Olympus expects to reduce its finished goods inventory by 50 percent in the near term. The company has already been able to streamline planning cycle times across its domestic locations, international subsidiaries and manufacturing sites.

The Manugistics solution imports and optimizes key data  such as inventory and order status, and manufacturing and transportation plans  from multiple sources, enabling the MAPS system to now handle about 3,000 items across Olympus' optical product line.

The software consolidates plans across Olympus' various organizations and generates an optimized weekly production, sales and inventory (PSI) plan based on the most recent data and sales forecasts. This PSI plan is then incorporated into the manufacturing process. The MAPS system also calculates safety stock levels by item at each sales subsidiary to prevent stock-outs.

With the MAPS system now in operation, Olympus is working toward further improving demand forecasting and PSI planning accuracy within its domestic and international group organizations.